Update and bump to the top.
Just to show how ahead of the news cycle I am,
Why Gas Prices Are Heading Back Up
Gasoline futures settled in New York at the highest price in nearly two months, surging over 20 cents in July alone.
August RBOB (New York Mercantile Exchange: RBCV1) gasoline futures gained nearly 1.5 percent and closed above $2.85 a gallon on Monday, mirroring the climb in oil prices as the U.S. dollar weakened and tensions rose in the Middle East.
Watching the TV news this morning one of the lead stories was that gasoline prices were falling. Quoting the Lundberg Survey we were told,
The average price for regular gasoline at U.S. filling stations fell 6.77 cents in the past three weeks to $3.4103 a gallon, according to Lundberg Survey Inc.
The survey covers the three weeks ended July 13 and is based on information received from about 2,500 stations by the Camarillo, California-based company. The average is down 20.47 cents from a year earlier. Gasoline is 55.67 cents below the year-to-date high of $3.9671 reached April 6.
I’m not sure where they are getting their numbers, but in my corner of the world prices have risen since just before July 4. On July 2, I paid a low of $3.25 a gallon at a discount gas station not far from my home. Last week, at the same gas station, I paid $3.39. Today, I drove by and saw the price marked as $3.43.
Gas prices are based on crude oil prices and gas companies follow those closely because they know that six months or so from now when the crude reaches their tanks as refined gas they are going to be paying what the price was back when the oil was sold. Which is why when crude oil prices jump, so do gas prices.
Another factor is demand world wide, which interestingly is down because of the slowing global economy. Which you would think would make crude oil and gas prices drop, but hasn’t. Why is that?
Because the dollar and the Euro continue to weaken and less buying power per dollar means prices on everything will rise.
I’d expect gas prices to continue to rise during the summer, but the truth is that it’s hard, if not impossible to predict this sort of thing. There are too many factors affecting crude prices, including the volatility of the Middle East. If there is an open conflict with Iran, the prices will probably go through the roof. Not because we buy oil from them, but because a lot of other places do and if they can’t ship crude oil to those countries, said countries will shop on the global market which will drive up prices.
Which makes the President’s decision to block the Keystone Pipeline look worse and worse every day.
I paid $3.57 in California on Saturday. ~8 hours later, outside of Phoenix, I paid $3.17. Prices are decidedly down out here; in March I was paying ~$3.60 in Phoenix. But like many “national” trends, local mileage (so to speak) may vary.
Down almost 50 cents here in NorCal. Costco still the best price in town at 3.52 yesterday.
None of the Costcos around here have gas stations for some reason. I wish they did, because they do have low prices.
One thing I noticed in late Spring/early Summer was that while prices were falling here, they were still going up for my friends who lived elsewhere. This is usually not the case; while TX does typically have fairly low gas prices, they tend to rise and fall in concert with the rest of the US. Of course, I do not think we have different “blends” for summer and winter like a lot of places do. The least we paid was $3.02 a gallon; when last we were at that same station it was $3.09. There’s a huge variance depending upon neighborhood, though; now that we live in a posher part of town, gas is up around the $3.20 mark.
Seems like a lot of places have lower prices than my area. Generally we’re not the lowest, but rarely are we the highest. Maybe the pols slipped in a new gas tax when I wasn’t looking. ’cause that always helps the economy you know.
Or you’re (where are you?) stuck with a regional blend that’s in shorter supply or god knows what.
The gasoline market is, for political reasons, so fragmented and distorted that “simple” economics barely describes half the fluctuations…
Meh- Depends on SO many factors… I paid $3.86 for Premium on Sat am, came back there Sun am, paid $3.96 at the SAME location. Went two miles away, same company, $4.06 (closer to the Interstate)… And yeah, it’ll continue to go up for the reasons you mentioned!
Of course if a Republican were in the WH, there would be only one factor!
I’m on Whidbey Island and the lowest price is $3.90 in Oak Harbour.. South Whidbey is at $4.00/gal cheapest. I’d give anything to pay $3.25, or even $3.50/gal! To the north, in Bellingham and Blaine (next to to the Canadian boarder) they are still $4.00+/ gallon. Sigh.